One way to make the most of your gift is to put a transition to retirement strategy in place, which can help make sure your legacy is structured in the most effective manner.
Things to think about include the amount you’d like to give, the timeframe for the donation and whether you would like to support the cause on an ongoing basis. With these in mind, you can then consider the most effective way to provide support.
If you’re planning to give a one-off amount, donate for a short period or give less than around $10,000, a direct tax-deductible donation to your preferred cause could be your best option. This is straightforward and is as simple as donating online or writing a cheque.
However, if you’re planning to donate over a longer period of time, a philanthropic structure could be more effective.
For example, a Private Ancillary Fund (PAF) connects donors with organisations able to receive tax-deductible donations, also known as Deductible Gift Recipients (DGRs). This type of fund must have corporate trustees – usually family members with an independent ‘responsible person’. There’s also a Public Ancillary Fund (PuAF), which can collect, hold and distribute gifts to DGRs.
You could also consider creating a testamentary or will trust, a Private Charitable Trust, or a Gift Fund to collect donations. These may be considered income-tax-exempt, though donations to them are not tax deductible.
When choosing the option that works best for you as you transition from business, it’s a good idea to talk to a qualified adviser with experience in this field.
With that done, you can take on your next challenge – whatever it might be – secure in the knowledge that you’ll be maximising the impact of your generosity while putting in place the structure that best fits your needs.